New England Electric System (NEES) and the majority leaders of both houses of the Rhode Island Legislature have proposed legislation that would restructure the state's electric utility industry. The legislation provides for full recovery of all stranded costs, and phases in open access for all retail customers by January 2001. Although customer choice would come about relatively quickly, rates would not decline much in the near term because a transition charge shields NEES from most of the restructuring risk. Indeed, NEES may be able to earn more under the proposal than it would under traditional regulation.
Narragansett Electric, a NEES subsidiary, serves 75 percent of Rhode Island's retail load and buys power under an all-requirements contract from New England Electric Power, another NEES subsidiary.
Proposed Structure
Customers would receive the right to choose their own power supplier according to the following schedule:
s January 1998 (em Manufacturing customers with demand over 1,500 kilowatts (Kw) and all new customers with demand over 200 Kw
s January 1999 (em All manufacturing customers with demand over 200 Kw
s January 2000 (em 50 percent of remaining customers in each rate class
s January 2001 (em All remaining customers.
This schedule would accelerate if competition develops rapidly in the rest of New England. If consumers of 50 percent of the electricity in New England become eligible to choose their own power supplier at any time before January 2001, open access would be extended to all Rhode Island customers within six months.